OLYMPIA -- Lynn Peterson can count on a bumpy ride when she takes the helm at the Department of Transportation next month.The Oregon woman named as the new transportation secretary Tuesday by Gov. Jay Inslee won't be able to steer around conflicts on funding, ferries and mega-projects as she settles in atop the organizational chart of one of the state's most high-profile agencies.Debate is beginning on a multi-billion dollar transportation funding proposal crafted by House Democrats. The linchpin of the plan is a 10-cent increase in the gas tax to pay for road work, bus service and highway construction.Replacement of the Highway 520 bridge continues to be dogged by questions about the costs of construction and durability of the pontoons.And the Washington State Ferries is foundering financially and losing faith with a handful of lawmakers bent on tightening their grip on the purse strings for the system.Peterson, who is Oregon Gov. John Kitzhaber's transportation policy adviser for two more weeks, said she knows she must "home in quickly" on the unfinished projects and get up to speed on the department's current initiatives.It is a "nice challenge and an amazing opportunity," said Peterson who will begin her $158,160 a year job on March 12.In Oregon, she handled all transportation-related issues for the governor except those associated with the construction of a new Columbia River Crossing.In Washington, she'll be in charge of an agency with 6,800 employees and an $8.7 billion budget and oversee a transportation system consisting of 18,600 lane miles of highways, 3,600 bridges, general aviation airports, the Washington State Patrol and the nation's largest state-run ferry system.Peterson will replace Paula Hammond who was appointed secretary in 2007. Hammond wanted to keep her job but now will retire March 8 after a 34-year career in the department"I leave with no regrets at all," she said. "I know (the employees) will be fine. I know they will do well. And I wish her much success."Inslee told Hammond on Saturday of his intent to change course. He said his decision should not be viewed as criticism of Hammond's tenure."It's much more about having a fresh look," he told reporters late Tuesday, adding she will "create a new vision for transportation in the state of Washington."Inslee declined to say if other personnel changes are coming, dodging a specific question on the future of Assistant Secretary David Moseley, who runs the state ferry system."We'll be talking about that when she gets on the job," he said.Peterson holds master's degrees in civil and environmental engineering and in urban and regional planning. She described herself as a professional not a practicing engineer.She served on the Clackamas County Commission before joining Kitzhaber's staff in February 2011.Among the initiatives she worked on for Kitzhaber were the Willamette Valley Passenger Rail Plan and expansion of the "electric highway," which increased the number of electric-vehicle charging stations on I-5.She's known for trying to meld land use planning with transportation in ways which emphasize availability of bus or rail services as well as paths for bikes and pedestrians."I am very much into finding ways to build communities and transportation is a big part of it," she said.Larry Ehl, editor and publisher of the respected Transportation Issues Daily online newsletter, called Peterson "an inspired pick.""It's very much in line with his talk and where he wants the state to go," he said. "She can be an ideas person. My impression is she's very smart, very articulate and very committed."House Speaker Frank Chopp, D-Seattle, said he was "heartened" by Inslee's choice and looked forward to having a new perspective on the balancing of spending on roads and transit.Rep. Marko Liias, D-Edmonds, a vice chairman of the House Transportation Committee and booster of transit funding, said he was "very encouraged" by her selection."I have not worked with her personally, but she brings a strong reputation of collaboration and creativity that are sorely needed as we tackle our state's transportation challenges," he said."Our new secretary served in county government in the Portland area, she clearly understands the challenges facing a growing county like ours," he continued. "We know she will advocate for sustainable transportation solutions that fit our Snohomish County values."Hammond leaves having etched her mark on transportation policy in a variety of ways.In 2007, she pulled the four aging Steel Electric-class ferries from service, severing the link between Port Townsend and Keystone Harbor on Whidbey Island for two months. Her action led to construction of three new 64-car ferries.In her first year, she also ordered closure of the Murray Morgan Bridge in Tacoma because of its debilitated state. It was refurbished and recently reopened.In her tenure, Hammond saw hundreds of projects completed using gas tax dollars approved in 2003 and 2005. She also teamed with former Gov. Chris Gregoire to get replacement of the Alaskan Way Viaduct and Highway 520 bridges under way. She also spoke out for light rail service on I-90."On a national level, she's the envy of state departments of transportation for what she's accomplished," Ehl said.Though Hammond knew of Peterson's hiring Saturday, she kept mum until Tuesday morning when, as word spread of the pending announcement, she emailed her top managers, then the workers."I couldn't have done this job without each and every one of you," she wrote her executive team. "The last six years have been a great roller-coaster ride full of thrills and scares, but I have a sense of great satisfaction and fulfillment now that the ride is over."She said she doesn't know her next career step. It might be with Mary Margaret Haugen, the ex-Camano Island state senator who ran the Senate Transportation Committee for several years."I think she and I will put a lemonade stand up at the Stanwood train station," she joked.

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